SEC Sri Lanka Shift: Record Recoveries, Stricter Enforcement & Delisting Retention 📈

• Record Enforcement Recoveries: SEC recorded a historic Rs 207 Mn recovery in 2025. This includes a landmark Rs 188 Mn out-of-court settlement for market manipulation under the SEC Act No. 19 of 2021 (triple the Rs 62.7 Mn illegal gain). • Enforcement Policy & "Name & Shame": Chairman Hareendra Dissabandara revealed the Rs 188 Mn anonymous settlement was pre-agreed by prior leadership. Going forward, the regulator will prioritize criminal prosecution (carrying up to 10-year prison terms) and a strict "name and shame" policy. • Company Retention & Market Scale: SEC successfully persuaded 45 companies to abort formal delisting plans, preserving market scale. However, listed entities fell from 296 (2021) to 285 (2025), with market capitalization shrinking from 36.7% of GDP to 27%. • Investigations & Institutional Process: Total investigations fell from 62 (2024) to 48 (2025), with 7 enforcement actions. Operations are now governed by standardized manuals alongside continuous Nasdaq surveillance. • Banking Sector Oversight: SEC is conducting a parallel investigation into banking major NDB following a revised Rs 13.2 Bn fraud disclosure (up from an initial Rs 380 Mn). • Compensation Fund: The fund balance reached Rs 917.2 Mn, though current laws restrict payouts solely to broker insolvency.